Asset Purchase Agreement
(Pro-Buyer) (Short Form) (DE)

Summary

This short-form asset purchase agreement is for use in the acquisition of a seller's assets for cash by the buyer and may be appropriate, in a transaction where a reduced set of provisions is sufficient, such as when relatively less consideration is at issue, particularly with respect to the size of the parties or where the acquisition 's structure and the nature of the acquired assets are relatively straight-forward and where the parties desire to simplify and reduce negotiation. This template contains practical guidance, drafting notes, alternate clauses, and optional clauses. Click here to see recent examples of publicly filed asset purchase agreements in Market Standards. This template is drafted in a way such that buyer will be purchasing real estate, property leases, inventory, and machinery, equipment, and vehicles used in the business. Depending on the nature of the business, some or all of these assets will need to be modified. This template assumes that the transaction will sign and close simultaneously. As a result, there are no closing conditions (or materiality scrapes), pre-closing covenants, or termination provisions that would otherwise be customary. The template is intended to be in accord with the provisions of the Delaware General Corporation Law. Under Delaware law, unless a corporation's charter states otherwise, approval of a sale of all or substantially all of a corporation's assets outside the "regular course of business" requires a resolution of the board of directors and approval of a majority of the stockholders entitled to vote on such sale. Del. Code Ann. tit. 8, § 271. This short-form asset purchase agreement assumes that the Corporation is private and closely held, and as such, approval by the board of directors and by a majority of the stockholders has been obtained prior to signing or will be delivered simultaneously with Closing. This short-form asset purchase agreement also assumes: • Seller employs less than 100 full-time employees, so no notification requirement under the Worker Adjustment and Retraining Notification Act is required; • There is no need for an escrow holdback (i.e., because Seller does not intend to distribute the Purchase Price to a disparate base of stockholders and can thus be tracked down served should an indemnity claim arise in the future); • The nature of the acquired assets is relatively straight-forward and does not necessitate detailed representations and warranties in any particularly unique area of law (e.g. intellectual property, data privacy and cybersecurity, environmental law, product manufacturing, etc.); • No transition services agreement, intellectual property assignment or license agreement, or employment agreements is necessary; • A single buyer and seller are parties to the transactions, with no additional seller stockholders; and • No use of representations and warranties insurance. This short-form asset purchase agreement assumes that no antitrust issues are presented, although it otherwise addresses regulatory schemes that are generally applicable without regard to industry such as tax, ERISA (defined herein), environmental and anticorruption laws. The form assumes that Seller is not the subsidiary of a group parent, and neither Seller nor Buyer is an S corporation. The form is generally pro-Buyer. However, there is commentary throughout the form indicating variations on certain provisions that are more pro-Seller. For a long-form asset purchase agreement, see Asset Purchase Agreement (Pro-Buyer) (DE) and Asset Purchase Agreement (Pro-Seller) (DE). For discussion of drafting considerations in asset purchase transactions, see Asset Purchase Agreement Basics, Asset Purchase Agreement Drafting Checklist, and Asset Acquisition Resource Kit. Market Standards enables users to search, compare, and analyze its comprehensive database of transactions using over 150 detailed data points to filter search results. You can customize any search to your needs by adding filters or modifying the search criteria. To compare selected state laws on asset sales and appraisal rights, see the Corporation and M&A section of the State Law Comparison Tool.